Why Engaged Couples Should Sign A Prenuptial Agreement
- Not just for celebritiesAlthough prenuptial agreements are often associated with celebrity couple—and their headline generating divorces—they are not just for people with boldface namesAny couple who brings personal or business assets to the marriage can benefit from a prenup. The most basic of these contracts lists an inventory of premarital assets that in an event of a divorce will remain the property of the original owner.“Prenups are good because they preserve the expectations of the parties and prevent surprises in the divorce trail,” says attorney Bob Nachshin, a partner in family law firm Nachshin & Langlois LLP in Los Angels and co-author of “I Do, You Do… But Just Sign Right Here: A Quick and Easy Guide to Cohabitation, Prenuptial and Postnuptial Agreements.” In my 34 years of practice I have never seen a prenuptial agreement that wasn’t enforced by the court.”The agreement can also specify that future income from a business or additional assets accrued through inheritance are not to be shared with your spouse if the marriage ends.
“You can basically do anything you want in a prenup except, you can’t limit child support and, you can’t limit child custody or visitation.
- Yours, mines and oursPrenuptial agreements can address property acquired before marriage, such as a home or Grandparent’s antique desk although, some states recognize each spouse’s rights to his or her premarital property anyway, according to attorney Brian Liu, chairman and co-founder of Legalzoom.com an online law center.“The problem people have is, after they get married, what becomes yours has comingled,” Liu says. “People can’t trace after 10 years of marriage what was theirs or joint property.”Other areas that a prenup can cover are the waving of spousal support and death benefits.“Even if you make a will and exclude your spouse some courts will look unfavorably on that,” Liu says. “If you have a prenuptial agreement you can say. ‘That was my intention to cut out the spouse.’”
- The Second Time AroundPrenup are especially helpful to older couples and/or those who already have children, says Lynn Gold-Bikin, a family law attorney and former chair of the American Bar Association’s family law section.“Older couples may want to protect children from prior marriage or protect the ability of the one with lesser assets to go into a nursing home and not give everything over,” Gold-Bikin says.People who have been married before are especially aware of the importance of take these steps the second time around.“A lot of time prenuptials agreements have bad connotation,” Liu says “I see them happening with people who have been divorced once and, have children and, have significant assets and want to male sure their children and family are protected if something happens.
- I Do’s, Don’ts“States have different rules for prenups. California requires an agreement be signed at least seven days after it has been presented. That both parties have attorney representation and that all assets be disclosed,” Nachshin says.Those requirements were added to law after the state Supreme Court upheld baseball star Barry Bonds prenuptial agreement, despite it being signed a day before his wedding and without his future wife having counsel, according to Nachshin who represented Bonds.Other circumstances to keep in mind is never sign an agreement after having a few drinks and to not present such an agreement when a woman is pregnant, because her medical condition could lead to it being over turned, Nachshin says.“Remember to talk about it with your spouse way before you plan your wedding, and have it signed four months before you plan on getting married,” Nachshin says. “Because otherwise, you’re so focused on the prenup you can’t focus on the joy of marriage.”
- Why ‘pre’ is better than ‘post’For couples who didn’t enter into a prenuptial agreement, they always have the option of forging such a pact after they say their vows. Postnuptial agreements are largely the same as prenups, laying out which assets will remain individual property and which will be shared.However, states may view postnups differently if they are challenged during a divorce. In California, for example, prenups are assumed to be legally valid, while postnups are presumed to be invalid—meaning the burden of proof with the latter is on the spouse trying to have terms enforced, Nachshin says.Still properly executed postnups should be able to stand up to court scrutiny.“I think if both parties have counsel, and there’s been full disclosure the postnup will be upheld,” he says.
- What’s fairPernuptial agreements are supposed to be based on fair and full disclosure of assets but, states vary in how they view this legal tenet says Gold- Bikin.“The prenup has to be considered fair at the time of being enforced,” she says.For example a spouse may agree she won’t take anything from a business worth $100 at the time she and her future husband sign the prenup. By the time the couple divorces the husband has transformed the business into the next Google or sold it for profit,Whether it was a fair agreement for the wife not to share in the business depends on the state, Gold-Bikin says.
- Separate accountsThere are other ways to keep assets separate that can work in conjunction with a prenup, or alone.A revocable living trust can ensure that certain property or income is directed to someone other than your spouse, Liu says.An even simpler tool is to retain separate bank accounts and keep real estate under your own names,“Some people when they get married immediately change title to property so it’s in both of their names,” Liu says. “The fact that you put your spouse on the deed, (a judge) is going to assume you meant to give half of interest to the spouse as a gift and, going to consider that joint property.
- What can gay couples do?
Same-sex couples living in states where their union lacks legal recognition can draw a cohabitation agreement that resembles a prenup. Similar rules apply: Each partner should have his or own attorney, disclose all assets and not sign the pact under duress Nachshin says.
With same-sex marriage being legal in six states and the District of Columbia this developing area of the law is made complicated by the fact that a vast majority of the states don’t allow such unions or recognize them legally.
“As more and more same sex-couples get married, they will experience the same thing heterosexual couples—they are going to get divorced,” Gold Bikin says. “The next time they get married they will get prenuptial agreements.”
Reference: Robert DiGiacomo, Bankrate.com